P&O Ferries sackings – illegal, immoral, ill thought out?

Recent redundancies at P&O Ferries have resulted in public outcry, but the consequences for the business remain to be seen.

This blog was adapted from an original article by Lydia Newman featured in the upcoming April issue of Governance and Compliance.

Readers will have their own views as to P&O Ferries’ decision to dismiss 800 staff was illegal, immoral and/or ill thought out, but what is clear is that it attracted far more attention than had been bargained for. The public backlash was probably not entirely unexpected, but it is interesting that a company that is dependent on the general public – as paying passengers or companies who conduct their business through P&Os routes – decided to pursue this course of action anyway. Clearly, the long-term interests of the company and its owners were viewed as more important.

Before establishing whether the dismissals were illegal, it is important to consider a number of factors.

The concept of dismissing employees without notice is not unheard of. In fact, it is relatively common for organisations to elect to dismiss an employee and pay them in lieu of notice. Whether that is ethical or moral will, of course, always depend on the circumstances.

Further, paying someone who is at risk of redundancy an additional sum to compensate them for the due process that ought to have been followed but might well have been futile is also quite common. Again, whether that is ethical or moral will, of course, always depend on the circumstances.

What the above demonstrate is that the principle applied by P&O Ferries is not too far removed from what happens regularly up and down the country. The fact that it is common does not make it right. Particularly if you are the employee who, after many years of service with your employer, finds out that your livelihood has been removed.

In P&O Ferries’ case, there are additional complications. In most circumstances where an employer is planning 20 or more redundancies (dismissals) in one establishment within a 90-day period, they must comply with collective consultation requirements which place additional obligations on the employer to consult with a recognised trade union or employee representatives and to inform the Secretary of State for Business, Energy and Industrial Strategy of the potential dismissals.

The idea is that large-scale redundancies should involve a more formal and prescribed consultation process, with a view to considering ways to avoid dismissals or mitigate the effects of said dismissals.

So why did P&O Ferries elect not to follow the usual procedures? There appear to be two main reasons for this.

First, according to P&O Ferries Boss, Peter Hebblethwaite, the company simply saw no point in doing so because the trade unions would never have agreed to their proposals.

The second factor remains somewhat murky because, so far, the nature of P&O Ferries’ employment relationship with the sacked employees is unclear. However, they might have determined that the collective consultation requirements under UK law did not apply to the staff because of the special nature of employees working on vessels and where they are registered. Put another way, P&O Ferries might have satisfied themselves that there was little or no risk of criminal sanctions in the UK because of the way in which the 800 or so staff were employed by them.

Rightly or wrongly, it may be that the government is powerless in the circumstances to take formal legal action against P&O Ferries. However, what does seem clear is that this episode has highlighted that the protections afforded to employees, particularly those who might not be aware of the laws protecting them, need further consideration.

Lydia Newman, Employment Solicitor

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